A reader of August’s high-yield, low-priced dividend dog list said this is “dangerous advice”. Hence, this information is to be used at your own risk.
I have always advised that high dividends are a sure sign of high risk. Combine that signal with a low-price offer and you have the stuff of legends and horror stories. Especially, in light of YCharts’ declaration that it allows a dividend yield to persist for 365 days after the most recently reported dividend if a dividend is cut. Therefore, a few line items you see calculated here could be totally inaccurate.
This July list selected no stocks reporting annual returns lower than 0%. Six selections this month showed yields greater than 20%. They were not removed, though their dividends are the most likely to be cut or curtailed.
Happy hunting, and beware of the numbers put up by the top six by yield on this list of 69. In short, this is risky business. These are Dogs of the Low, not of the Dow. These dogcatcher metrics are set to snag the most unloved and unpopular curs as a contrarian stock selection strategy.
To learn which of these 69 are ‘safer’ dividend dogs in the next few days, click on the “get started today” link in the last summary bullet above and read The Dividend Dogcatcher marketplace follow-up ‘safer’ 10%+ yield at $5-$15 dividend stock article.
Actionable Conclusions (1-10): Brokers Calculated 34.58% To 110.05% Net Gains For Ten 10%+ Yield at $5-$15 Stocks As Of July 6, 2021
Five of the ten top yield 10%+ yield at $5-$15 dogs were among the top ten gainers for the coming year (based on analyst 1-year targets). So, this forecast, as graded by Wall St. Brokers, was 50% accurate.
Projections based on dividends from $1,000 invested in the highest yielding stocks and the median of analyst one-year target prices, as reported by YCharts, created the 2020 data points. Note: one-year target prices from single analysts were not applied (n/a). Ten estimated profit-generating trades to July 6, 2021 were:
Service Properties Trust (SVC) was projected to net $1,100.50 based on estimated dividends, plus the median of target estimates from three brokers, less broker fees. The Beta number showed this estimate subject to risk 98% greater than the market as a whole.
USA Compression Partners LP (USAC) was projected to net $988.14 based on dividends, plus the median of target estimates from seven brokers, less broker fees. The Beta number showed this estimate subject to risk 139% over the market as a whole.
Frontline Ltd. (FRO) netted $928.14 based on dividends plus the median of target estimates from five brokers, less broker fees. The Beta number showed this estimate subject to risk 58% under the market as a whole.
Euronav NV (EURN) was projected to net $826.06, based on dividends plus the median of prices estimated by ten analysts, less broker fees. The Beta number showed this estimate subject to risk 60% under the market as a whole.
Kimbell Royalty Partners LP (KRP) was projected to net $627.32 based on dividends plus the median of prices estimated by eleven analysts, less broker fees. A Beta number was not available for KRP.
Hoegh LNG Partners (HMLP) was projected to net $594.08, based on dividends, plus the median of target price estimates from seven analysts, less broker fees. The Beta number showed this estimate subject to risk 93% over the market as a whole.
KNOT Offshore Partners LP (KNOP) was projected to net $578.45 based on dividends, plus the median of prices estimated by two analysts, less broker fees. The Beta number showed this estimate subject to risk 41% over the market as a whole.
DHT Holdings Inc. (DHT) was projected to net $519.86, based on the median of prices estimated by six analysts, plus dividends , less broker fees. The Beta number showed this estimate subject to risk 19% opposite the market as a whole.
Monroe Capital Corp. (MRCC) was projected to net $414.23, based on the median of prices estimated by seven analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 28% over the market as a whole.
Fidus Investment Corp. (FDUS) was projected to net $345.83, based on dividends plus the median of prices estimated by seven analysts, less broker fees. The Beta number showed this estimate subject to risk 68% over the market as a whole.
The average net gain in dividend and price was estimated at 69.23% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 50% greater than the market as a whole.
The Dividend Dogs Rule
Stocks earned the “dog” moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as “dogs.” More precisely, these are, in fact, best called, “underdogs”.
50 Broker Price Target Upsides
50 10%+ Yield at $5-$15 Top Dogs By Yield
Actionable Conclusions (11-20) Top Ten 10%+ Yield at $5-$15 Dog Yields Ranged 17.75%-37.69%
Top ten 10%+ yield at $5-$15 dogs selected 7/6/20 by yield represented four of eleven Morningstar sectors.
Six representatives from the energy sector placed first through third, fifth, seventh, and ninth. Tops was Frontline Ltd. , followed by Oasis Midstream Partners LP (OMP) ; DHT Holdings Inc. ; Crestwood Equity Partners LP (CEQP) ; USA Compression Partners LP .
In fourth place was the lone real estate representative, Service Properties Trust . An industrials representative placed sixth, Bpost SA De Droit Public (OTCPK:BPOSY) .
Then, two stocks from the financial services sector placed eighth and tenth: Apollo Investment Corporation (OTC:AINV)  and TCG BDC Inc. (CGBD) , to complete the 10%+ yield at $5-$15 top ten for July 2020-21.
Actionable Conclusions: (21-30) Ten 10%+ Yield at $5-$15 Top Yield Stocks Showed 21.87% To 87.04% Upsides To July 2021 And Two Downsiders Laid Low
To quantify top yield rankings, analyst median price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield metrics, analyst mean price target estimates became another tool to dig out bargains.
Analysts Estimated A 12.29% Advantage For 5 Highest Yield, Lowest Priced Of Ten 10%+ Yield at $5-$15 Dogs To July 2021
Ten top 10%+ yield at $5-$15 dogs were culled by yield for this June update. Yield (dividend/price) results verified by Yahoo Finance did the ranking.
As noted above, top ten 10%+ yield at $5-$15 priced dogs selected 7/6/20 showing the highest dividend yields represented four of eleven sectors in the Morningstar scheme.
Actionable Conclusions: Analysts Estimated 5 Lowest-Priced Of Top Ten Highest-Yield 10%+ Yield at $5-$15 Dogs (31) Delivering 19.7% Vs. (32) 110.05% Net Gains From All Ten By July 6, 2021
$5,000 invested as $1k in each of the five lowest-priced stocks in the top ten 10%+ yield at $5-$15 dogs collection was predicted by analyst 1-year targets to deliver 12.29% more net gain than $5,000 invested as $.5k in all ten. The third lowest priced, Service Properties Trust, was projected by analysts to deliver the best net gain of 110.05%.
The five lowest-priced top 10%+ yield at $5-$15 dogs as of July 6 were: DHT Holdings Inc.; Bpost SA De Droit Public; Service Properties Trust; Frontline Ltd.; Oasis Midstream Partners LP, with prices ranging from $5.36 to $7.99.
Five higher-priced >10% yield at $5-$15 priced dogs from July 6 were: TCG BDC Inc.; Apollo Investment Corp.; Hoegh LNG Partners LP; USA Compression Partners LP; Crestwood Equity Partners LP, whose prices ranged from $8.34 to $11.74.
The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O’Higgins’ “basic method” for beating the Dow. The scale of projected gains based on analyst targets added a unique element of “market sentiment” gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.
The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of “dividends” from any investment.
Below is the alphabetical by symbol listing of all 69 May 10%+ yield stocks priced at $5-$15 from YCharts as of 7/6/20.
Stocks listed above were suggested only as possible reference points for your 10% yield at $5-$15 priced dividend dog purchase or sale research process. These were not recommendations.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.
In addition, my YCharts data supplier makes no warrants regarding their forward looking dividend accuracy. Here is their dividend yield statement: “2) We allow a dividend yield to persist for 365 days after the most recent reported dividend if a dividend is cut. Hence, this data should not be used for backtesting purposes. For true historical testing purposes, one would need the date the company announced a cut or increase in the dividend to get the proper expected dividend yield as of a given date.”
“The forward yield won’t catch changes as there is not an automated method for turning those announcements into that kind of data. A specific use case would require additional over-site after the screening had taken place to catch these instances. I wish there was an easier way, and I will submit feedback, but as of yet this has been how we’ve always done things for lack of a better method.”
Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by YCharts. Dog photo: marcthevet.com
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.